A Ray of Hope for Nintendo

Nintendo may be down, but it's not out. New sales figures released this week show a hint of success for the company on both the hardware and software sides of the video-game market lately. And that's good news for investors betting that Nintendo can beat the odds and post a strong holiday quarter.

According to research firm NPD, the 3DS handheld system outsold all other hardware platforms last month -- for the fourth month in a row. The 3DS has been a real bright spot for Nintendo, booking 32 million device sales since launch. The system's Mario & Luigi: Dream Team title also had a great start in August, coming in as the sixth best-selling title across all console and PC platforms. But the really good news for Nintendo was that Pikmin 3, a Wii U exclusive, also made the top-10 list for software sales last month. That's quite a feat, considering the hefty competition from the likes of Electronic Arts and Disney. It's also impressive considering that the installed base for the Wii U is less than 4 million, a tiny fraction of the numbers that Microsoft and Sony have built up for their current generation systems.

August's strong results suggest that Nintendo was right when it blamed the lack of first-party titles for the brutal launch that the Wii U has had. That struggling console suffered a terrible inaugural year in the market, selling well below the 10 million Xbox 360 devices that Microsoft moved in the same period. And the spring quarter was especially bad for the Wii U: Nintendo managed to sell just 160,000 units worldwide.

However, the company has been saying that new games will turn the tide on its console and eventually make it a contender against the more expensive next-gen offerings from Sony and Microsoft. So with the price cut announced last month, and a new crop of first-party games lined up, Nintendo aims to charge back into console relevance.

The Pikman 3 title was the company's first jab at that strategy, to be followed by highly anticipated additions to the powerhouse franchises of Zelda, Donkey Kong, and Super Mario in the months ahead. If those games are as well received as Pikman 3, they'll easily drag the Wii U's sales numbers higher. And, together with an already strong-selling 3DS, Nintendo might just log some respectable results this holiday.

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